Spotlight on CEE: Hungary is booming

Central and Eastern Europe is becoming a driver of European growth, and Hungary's property sector is one of the leading lights

In 2018, office, home and hotel developments may break a record in Hungary, which are presented to the international investors by the Hungarian property development entrepreneurs at the EXPO REAL in Munich.

The achievements that are considered outstanding even on a regional level contribute to Hungary’s leading role in several fields in the Central European region, which is becoming the driver of Europe’s economic growth.

That is why Hungarian developments are in the limelight at Europe’s largest property-related event, which are to be presented by the Hungarian exhibitors between 8–10 October, at the Budapest exhibition stand to be set up as a result of a cooperation between the Municipality of Budapest, the Hungarian Investment Promotion Agency (HIPA) and the Roundtable Association of Property Developers (Ingatlanfejlesztői Kerekasztal Egyesület – IFK).

The profession-related roundtable consultation that is to be led by Courtney Fingar, editor in chief of fDi Magazine, is expected to attract international attention, as the meeting will provide opportunity to international investors and property developers to get insight into the regional and Hungarian market.

Participants in the the professional section to be organised at the Budapest stand will be Róbert Ésik, President of the Hungarian Investment Promotion Agency (HIPA), Noah M. Steinberg Chairman & CEO of WING, Lorant Kibedi Varga MRICS, Managing Director, CBRE Hungary, Philippe Beurtheret, General Manager, Ceetrus Hungary, Jan Hübner, CEO of HB Reavis Hungary, and André Zücker, Managing Director at KGAL. Prioritised government and municipal developments, the Liget Budapest Project, and other world-class projects in progress in Budapest, as well as the prioritised projects of the four Hungarian University centres (Debrecen, Miskolc, Pécs and Szeged) will also be introduced.

Significant property developers - Atenor, Ceetrus, Forestay Development, Futureal Group, Gránit Pólus Group, HB Reavis, Horizon Development, Property Market, WING - will present such ongoing and future developments that influence the city image. The world’s leading property consultation company, CBRE is also among the exhibitors. Duna House Group, Central and Eastern Europe’s largest real-estate agency group, and KPMG Hungary, one of the world’s leading auditing, tax and business consulting companies will also make an appearance at the stand; and furthermore, the field of property law will be represented by Lakatos, Koves & Partners Law Office that ranks first on international rankings.

Hungary is providing outstanding performance in property development, even as compared to the regional standard. The region is becoming increasingly attractive for investors, and last year Hungary has 15% share in the overall investment turnover. The property development sector has recently shown a significant uplift, which continues in 2018 as well. When compared to 2010, Hungarian investments have proved to make the largest growth in the region: in the past eight years developments have been expanded by over 25%, and – as this trend seems to continue – Hungary is expected to keep its leading role in the region. The country has been added to the world list of top 10 target countries for investment, and furthermore, on a regional level, it ranks first in two categories in the 2018 report of Site Selection Global Best to Invest specialising in investment issues.

GáborBagdy, deputy mayor of Budapest said that as a result of the firm economic and political environment, and several governmental and municipal actions, the Hungarian capital could become the major European target in all segments of international property development.

Róbert Ésik, President of the Hungarian Investment Promotion Agency (HIPA) stressed that the beneficial investment and tax environment, developed road and telecommunications infrastructure, logistical potentials, as well as opportunities offered by the dynamically developing, five-time Skytrax Award-winner Budapest Airport represent a major attractive force for both foreign direct investors and property developers.

Benedek Gyorgyevics, general manager of Városliget Zrt., leader of the Liget Budapest Project: Budapest has recently developed in a spectacular way, being recognised internationally for preserving the traditional values of the city, as well as creating new values. The complex projects of renewing districts shaping the future and image of the Hungarian capital are of unequalled scale across Europe. Liget Budapest is a good example of this approach, there is no urban development project in the region of the same scale and quality today.

Ernő Takács, president of the Roundtable Association of Property Developers, the largest organization consisting of the major Hungarian property developers underlined that Hungary has a leading role in property developments in the region, as – according to CBRE’s annual report – the value of investments into Hungarian properties has increased by 71% since 2012, as compared to the Central European regional average of 26%.

Budapest exhibition stand’s programme attracts significant attention at EXPO REAL, as – after long years of stagnation – the Hungarian property market is now prospering, prices are increasing, and there has been major expansion in the sector.

In 2017, properties of a total value of €1.8bn were bought by domestic and foreign property investors in Hungary, and this volume is presumed to make a slight increase this year. The growth rate of sales revenues per hotel rooms exceeds that of other significant cities in Central and Eastern Europe. Hungarian office market is also vibrant; in the second quarter of 2018 only 7.6% of offices were vacant in Budapest, while this value was 21.5 % in the third quarter of 2012. As for industrial properties, only 3.5% of them are standing vacant.

In Hungary, investments of the largest volume are expected to be implemented in the office market, this segment will show unprecedented results, as it offers high rate of return to investors with low market access threshold in an international comparison. Those interested may have first-hand information on the Hungarian market from the largest developers, as the Budapest exhibition stand will offer several profession-related roundtable consultations.

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